New Delhi: Union Oil Minister M Veerappa Moily on Thursday said that the government has taken first and decisive step towards deregulating diesel prices which will give the Oil marketing companies (OMCs) a free hand to bring change in the prices of diesel.

Talking to an English news Channel, the Oil Minister said, “We have now (by partially deregulating diesel prices) given liberty to all our OMCs to bring in small change from time to time”.

The oil companies have been permitted to raise diesel prices by a small quantum periodically till such time that they are able to cover Rs 9.60 per litre loss they incur on the fuel.

Talking on the issue of subsidy and under-recovery, the minister said, “We cannot abruptly stop subsidy on fuel and we also cannot abruptly allow OMCs to seize the under-recovery”.

On being asked about further deregulating the diesel prices, he said that, “The government also has to look after the health of the OMCs, suffering from heavy losses owing to under-recoveries”.